Alan Greenspan Warns: Stagflation is Coming

Stagflation happened in the United States during the 1970s, when the country underwent a recession that saw five quarters of negative GDP growth. Inflation nearly tripled in 1973 and hit double digits between 1974 and 1975, and unemployment hit 9% by May 1975.

The period made mincemeat out of the so-called Phillips Curve, a mainstream Keynesian economic view that there is a direct tradeoff between accelerating price inflation and climbing unemployment.

Greenspan's view is not that much different from my view which I detail the EPJ Daily Alert. However, I believe that the price inflation and weakening economy could be much more severe than Greenspan does.